Young people are more prepared to consider all types of investments than their older counterparts, according to a new survey, potentially lifting the fortunes of trading apps such as Robinhood which have proven popular with the younger market.
An Opinium survey from April showed that 18-34-year-olds were more prepared to consider almost every type of investment compared to their older counterparts, although property remained the most popular choice of investment with 40% of the age group saying they would invest in the segment.
“Our love affair with property knows no bounds, so it’s no shock that when people are prepared to invest, they favour property over anything else. Homeowners tend to think they understand property, but investing in it is very different to owning your own home, and comes with substantial costs and risks”, said Sarah Coles, personal finance analyst at Hargreaves Lansdown.
The stock market, by contrast, was a distant second at 19%. However, the higher willingness of the young to invest could prove to be a boon for app-based investment firms like Robinhood, which has proved popular with youngsters through its simplified app interface and a convenient way to trade stocks.
While Robinhood has indefinitely delayed its planned UK launch, this also means players in the British market including IG Group Holdings PLC (LON:IGG) and Plus500 Ltd (LON:PLUS) to gain share in the youth investor segment before a larger competitor muscles in.
Meanwhile, across all age groups property continued to hold its edge with 36% preferring its as a possible investment, although the largest segment, 38%, said they were not interested in any of the offered asset classes to invest in.
Alternative investments such as coins, wine, cars and stamps were even less popular, attracting only 12% of respondents between them.
“The fact that so few people are interested in alternative investment like wine and cars makes sense. Some people make money out of this kind of alternative investment, but they come with serious costs and risks, so unless this is your passion and you’re prepared to lose money in order to collect something you love, there are less risky options”, Coles said.
“Investment isn’t right for everyone. If, for example, you have lots of expensive debt or no cash savings, these should be your first priorities. Alternatively, if you need to spend the money within the next five years, investments won’t be suitable. But beyond that, you need to at least consider making your money work harder, and once investment is on the table it’s essential we don’t write off stocks and shares”, she added.